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Europe up before jobs data
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September 3, 1999: 8:02 a.m. ET
Financial deals push up London, Frankfurt; Paris gains from auto stocks
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LONDON (CNNfn) - European markets held on to modest gains Friday ahead of key U.S. employment data as a possible $17 billion merger in the U.K. banking sector provided a much-needed lift after recent slides.
All of the major markets posted gains -- although off session highs -- with financial, information technology and cyclical stocks dominating buying activity.
London's FTSE 100 was 30 points, or 0.48 percent, ahead at 6,225.20, boosted by NatWest Bank's possible $17 billion takeover of insurance and pension provider Legal & General.
Germany's Xetra Dax was also lifted by activity in the financial sector. The index climbed 36 points, or 0.7 percent, to 5,226.42.
The CAC 40 in Paris also climbed 0.7 percent, advancing 31 points to 4,581.6. Zurich's SMI index rose 31 points at 7,045.5, and smaller markets also posted gains, led by a 0.6 percent rise in Amsterdam.
The pan-European Eurotop 300 index, a gauge of the overall mood across the region, was up 0.6 percent at 1,291.91, with life insurers rising 3.2 percent and information technology climbing 1.2 percent.
U.S. stocks looked set for a slightly higher open Friday, with S&P 500 futures quoted 2.20 points higher on the Globex trading system at 1,322.20. London brokers estimated fair value, which takes into account the effect of dividend payments and interest costs, at 1,320.97.
Legal & General's (LG) talks with NatWest (NWB) drove its stock up 5 percent to 202 pence, close to the expected offer price of 210 pence. NatWest lost 4.3 percent on fears it may overpay.
Other insurance stocks basked in the deal's shadows, with Norwich Union (NU) jumping 10.6 percent to lead the FTSE's risers amid speculation it could become a bid target for Barclays {LSE:BARC], which traded flat. CGU (CGU), another possible bid target, jumped 6.6 percent.
Advancers outweighed decliners two to one.
In Frankfurt, Commerzbank (FCBK) built on early gains to stand 4.3 percent higher after it said it may set up a pan-European investment bank with partners including Crédit Lyonnais.
More details on the planned utility merger between Veba (FVEB) and Viag {FSE:FVIA] kept their shares in play. Speculation that the deal could effectively involve a takeover by Veba sent is shares down 2.5 percent while Viag gained 2.4 percent.
In Paris, auto stocks underpinned Friday's gains. Peugeot (PUG) was up 4.6 percent ahead of upbeat interim results due next week. Renault (PRNO) advanced 1 percent, backing off from a new 1999 high of 55 euros, after posting robust first-half earnings Thursday.
--from staff and wire reports
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